Enters into commitment letter with CIBC for $25 million secured credit
SYMBOL: HIS (TSXV)
LAVAL, QC, Jan. 20, 2012 /CNW Telbec/ - Hart Stores Inc. (TSXV: HIS)
announces that the Québec Superior Court today granted an Order
authorizing Hart Stores to file a Plan of Arrangement under the Companies' Creditors Arrangement Act (Canada). The Plan of Arrangement calls for Hart Stores to make
payments totaling $6 million over three years to the Monitor (RSM
Richter Inc.) under the CCAA, for distribution to Hart Stores'
creditors. Under the Plan of Arrangement, creditors may elect to
receive their pro rata share of the $6 million, or a lump-sum payment
equal to the lesser of the value of their claim or $1,000.
Hart Stores will call a meeting of creditors to vote on the Plan of
Arrangement, expected to be held in February. If the Plan of
Arrangement is approved by creditors at the meeting, it will be
presented to the Québec Superior Court for ratification.
Today's Order also extended to March 14, 2012 the period during which
all proceedings on the part of Hart Stores' creditors are stayed. This
is a further extension of the stay period initially granted by the
Superior Court on August 30, 2011. The Order also granted a concurrent
extension to March 14, 2012 of the maturity date of Hart Stores'
interim credit facility with Wells Fargo Capital Finance Corporation
Hart Stores is also pleased to announce that it has entered into a
commitment letter with CIBC Asset-Based Lending for a secured credit
facility of up to $25 million. The new credit facility is intended to
replace Hart Stores' existing credit facility with Wells Fargo Capital
Finance Corporation Canada, in order to fund the Company's operations
upon completion of its financial restructuring under the CCAA.
The new credit facility with CIBC Asset-Based Lending is conditional
upon numerous factors, including execution of appropriate legal
documentation and registration of security, termination of Hart Stores'
existing credit facility with Wells Fargo Capital Finance Corporation
Canada, CIBC's satisfaction with the Plan of Arrangement and the other
terms and conditions of Hart Stores' exit from CCAA proceedings, and
the obtaining by Hart Stores of all necessary creditor and court
approvals relating to the Plan of Arrangement on terms and conditions
satisfactory to CIBC.
RSM Richter Inc. has been appointed Monitor pursuant to the Initial
Order of the Québec Superior Court. All inquiries regarding the CCAA
proceedings should be directed to the Monitor. Further information
about Hart Stores' restructuring can be found on the Monitor's website
at the following address: http://www.rsmrichter.com/Restructuring/Hart.aspx.
About Hart Stores Inc.:
Hart Stores Inc. operates a network of 88 mid-sized department stores of
which 28 stores have been slated for closure in early 2012, under the
Hart, Bargain Giant and Géant des Aubaines banners. The stores are
located in secondary and tertiary markets throughout Eastern Canada
where the Company has established a dominant position in many of the
communities that it serves. The stores offer an extensive and
differentiated selection of national and exclusive fashion apparel
brands as well as family footwear, home furnishings, electronics,
appliances, giftware, toys and seasonal goods.
Forward-Looking Statements and Disclaimer
Certain statements included in this press release may constitute
"forward-looking statements" within the meaning of the Canadian
securities legislation. Forward-looking statements are based on the
best estimates available to Hart Stores at the time and involve known
and unknown risks, uncertainties and other factors that may cause
Hart Stores' actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. A
description of the risks affecting Hart Stores' business and activities
appears under the heading "Risks & Uncertainties" in Management's
Discussion and Analysis on pages 18 to 20 of Hart Stores' 2011 Annual
Report, which is available on SEDAR at www.sedar.com. No assurance can be given that any events anticipated by the
forward-looking information in this press release will transpire or
occur, or if any of them do so, what benefits that Hart Stores will
derive therefrom. In particular, no assurance can be given as to the
future financial performance of Hart Stores. Undue reliance should not
be placed on these forward-looking statements, which are made only as
of the date of this press release. Hart Stores disclaims any intention
or obligation to update or revise any forward-looking statements in
order to account for any new information or any other event.
SOURCE HART STORES INC.
For further information:
Hart Stores Inc.
Mr. Robert Harritt
Vice-President Finance and Chief Financial Officer
Hart Stores Inc.
(450) 661-4155, ext. 595
RSM Richter Inc. (Monitor)
Benoit Gingues, CA
Partner, RSM Richter Inc. (514) 934-3514
Stéphane De Broux, CA
Vice President, RSM Richter Inc. (514) 934-8621